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Where Oil and Politics Mix

After an unusual land deal, a giant spill and a tanker-train explosion, anxiety began to ripple across the North Dakota prairie.

Dr. Lyle Best lives downwind from flares that he says roar like jetliners and, what is worse, waste needed natural gas.

Jim Wilson/The New York Times

Where Oil and Politics Mix

By DEBORAH SONTAG
NOV. 22, 2014

After an unusual land deal, a giant spill and a tanker-train explosion, anxiety began to ripple across the North Dakota prairie. Read Part 1

TIOGA, N.D. — In late June, as black and gold balloons bobbed above black and gold tables with oil-rig centerpieces, the theme song from “Dallas” warmed up the crowd for the “One Million Barrels, One Million Thanks” celebration.

The mood was giddy. Halliburton served barbecued crawfish from Louisiana. A commemorative firearms dealer hawked a “one-million barrel” shotgun emblazoned with the slogan “Oil Can!” Mrs. North Dakota, in banner and crown, posed for pictures. The Texas Flying Legends performed an airshow backlit by a leaping flare of burning gas. And Gov. Jack Dalrymple was the featured guest.

Traveling through the “economically struggling” nation, Mr. Dalrymple told the crowd, he encountered many people who asked, “Jack, what the heck are you doing out there in North Dakota?” to create the fastest-growing economy, lowest unemployment rate and (according to one survey) happiest population.

“And I enjoy explaining to them, ‘Yes, the oil boom is a big, big help,' ” he said.

Gov. Jack Dalrymple with Janelle Steinberg, Mrs. North Dakota, at a celebration in Tioga in June for reaching a milestone: one million daily barrels of oil.

Paul Flessland

Outsiders, he explained, simply need to be educated out of their fear of fracking: “There is a way to explain it that really relaxes people, that makes them understand this is not a dangerous thing that we’re doing out here, that it’s really very well managed and very safe and really the key to the future of not only North Dakota but really our entire nation.”

Tioga, population 3,000, welcomed North Dakota’s first well in 1951, more than a half-century before hydraulic fracturing liberated the “tight oil” trapped in the Bakken shale formation. So it was fitting that Tioga ring in the daily production milestone that had ushered the Bakken into the rarefied company of historic oil fields worldwide.

But Tioga also claims another record: what is considered the largest on-land oil spill in recent American history. And only Brenda Jorgenson, 61, who attended “to hear what does not get said,” mentioned that one, sotto voce.

The million-barrel bash was devoid of protesters save for Ms. Jorgenson, a tall, slender grandmother who has two wells at her driveway’s end and three jars in her refrigerator containing blackened water that she said came from her faucet during the fracking process. She did not, however, utter a contrary word.

“I’m not that brave (or stupid) to protest among that,” she said in an email afterward. “I’ve said it before: we’re outgunned, outnumbered and out-suited.”

North Dakotans do not like to make a fuss. Until recently, those few who dared to challenge the brisk pace of oil development, the perceived laxity of government oversight or the despoliation of farmland were treated as killjoys. They were ignored, ridiculed, threatened, and paid settlements in exchange for silence.

But over the past year and some, the dynamic seemed to be shifting.

Satellite photos of western North Dakota at night, aglitter like a metropolis with lighted rigs and burning flares, crystallized its rapid transformation from tight-knit agricultural society to semi-industrialized oil powerhouse. Proposals to drill near historic places generated heated opposition. The giant oil spill in Tioga in September 2013 frightened people, as did the explosion months later of a derailed oil train, which sent black smoke mushrooming over a snowy plain.

The engine of an oil train that derailed and exploded in a collision near the governor’s hometown, Casselton, in December 2013.

Jim Wilson/The New York Times

Then, this year, North Dakotans learned of discovery after discovery of illegally dumped oil filter socks, the “used condoms” of the oil industry, which contain radiation dislodged from deep underground.

Suddenly a percolating anxiety came uncorked. “The worm is turning,” Timothy Q. Purdon, the United States attorney, said in April.

It was against this backdrop that on a brisk spring day David Schwalbe, a retired rancher, and his wife, Ellen Chaffee, a former university president, walked headlong into the wind on their way to an F.B.I. office in Fargo.

A mile-long oil train was rumbling through downtown. Wordlessly, Mr. Schwalbe tightened his grip on the black binders bearing what he considered evidence, based on an unusual deal involving his family’s land, that Governor Dalrymple had a corrupt relationship with the oil industry.

‘This has David kind of nervous,” Dr. Chaffee confided. “He comes from a very below-the-radar culture.”

A landfill that takes waste from oil fields, situated close to the banks of the Missouri River.

Jim Wilson/The New York Times

An oil field service vehicle on a recently cut and regraded access road near Watford City, N.D.

Jim Wilson/The New York Times

A battery of oil storage tanks in a production unit.

Jim Wilson/The New York Times

Oil trains for the BNSF Railway pass through Minot, N.D., on their way east from the Bakken.

Brent McDonald/The New York Times

A Potential Advantage for the Oil Industry

As a boy in the 1950s, Mr. Schwalbe scampered up and down the steep banks of Corral Creek, which flows from Killdeer Mountain into the Little Missouri River. His family homestead lay in the remote region where Theodore Roosevelt sought solitude in what he called the “desolate, grim beauty” of the Badlands.

Like many in his generation, Mr. Schwalbe took for granted the craggy buttes and rippling grasslands, the cottonwoods and poplars, the mule deer and mountain lions. He never anticipated a day when this singular landscape would be ravaged, in his view, by rigs, pumping units, waste pits and pipelines and when he would become an archetypal North Dakotan of a certain age, disheartened by what others saw as progress.

As he helped his father run cattle 11,000 feet above the Bakken formation, Mr. Schwalbe came to understand that the family ranch would never sustain his parents and their six adult children. After college, he settled in eastern North Dakota, returning home mostly for “brandings, hunting and holidays.”

Ellen Chaffee and her husband, David Schwalbe, gave the F.B.I. what they considered evidence of Governor Dalrymple’s corrupt relationship with the oil industry.

Jim Wilson/The New York Times

When their father died, five Schwalbe siblings — David, Dennis, Donnie, Donnette and Dale — sold their shares of the ranch to their brother Delry. All six kept their rights to what lay beneath the surface, however. Just in case.

The Schwalbes were following the lead of Burlington Northern Railroad, which once owned every other tract in the area, the legacy of a federal land grant. The railroad eventually sold the surface but retained the minerals, which were managed by its energy company, Burlington Resources, now a subsidiary of ConocoPhillips.

“We figured they knew something we didn’t,” Mr. Schwalbe said.

Land has long been sliced and diced in North Dakota from generation to generation, with surface ownership severed from the ownership of underlying minerals like coal and oil. Given that mineral rights trump surface rights, this made many residents of western North Dakota feel trampled once the boom began.

In 2006, a land man for Marathon Oil offered to lease the Schwalbe siblings’ 480 acres of minerals for $100 an acre plus royalties on every sixth barrel of oil.

“Within a few years, people were getting 20, 30 times that and every fifth barrel,” Mr. Schwalbe said. But the Schwalbes did not expect “to see any oil come up out of that ground in our lifetime.”

Oil companies were just starting to combine horizontal drilling with hydraulic fracturing to tap into the mother lode of Bakken oil. “We didn’t really know yet about fracking,” he said.

The Schwalbes’ first well was drilled in 2008, their second the next year. Powerless to block the development, Mr. Schwalbe and his wife, nearing retirement, took some comfort in the extra income, the few thousand dollars a month.

Then that was threatened, too.

On June 20, 2011, the Schwalbes received a letter informing them that Burlington Resources intended to forge a 30,883.94-acre oil production unit that would effectively override their lease agreement with Marathon and subsume their mineral property. In the Bakken, such units are typically 1,280 acres.

The Schwalbes were instructed to sign a ratification agreement by August, when a hearing was scheduled on what some started calling “the mega-unit.” The mega-unit would include the Little Missouri State Park, a patchwork of private, state and federal land beloved for its rugged trails.

Initially perplexed by the thick document on their doorstep, the Schwalbes soon grasped a painful point: though they would be ceding control of their mineral property, their consent was not required. Only the owners of 60 percent of the unit’s minerals were needed for ratification, and Burlington, together with the federal government, already met that goal.

“That’s part of why they chose Corral Creek for their scheme,” Dr. Chaffee said. “They didn’t have to deal with a lot of fleas like us, the pesky citizens.”

The proposal had the potential to set an advantageous precedent for the oil industry.

As ConocoPhillips officials explained at the August hearing, they aimed to maximize oil recovery by being freed of the “artificial boundary lines” that require 200-foot setbacks from the borders of each standard production unit. Their plan would allow for 23 more wells; for 73,000 more barrels of oil per well; and for consolidated production that would reduce “surface disturbance,” truck traffic and air pollution. It was a proposal “for the common good,” they said.

Members of the North Dakota Industrial Commission, which oversees the oil industry, from left: the agriculture commissioner, Doug Goehring; Governor Dalrymple; and the attorney general, Wayne Stenehjem.

Jim Wilson/The New York Times

Many of the “pesky citizens” were skeptical. “Basically this whole unit scenario is only good for one person, and that’s Burlington,” Leroy Fettig, a land and mineral owner, said at the hearing.

In normal units, oil leases expire after a set time if no drilling occurs and owners can then renegotiate on better terms or put them up for bid. But under the proposed unit, Mr. Fettig said, “You wouldn’t have to drill one additional well to hold all the acreage here theoretically for a very long period of time.”

He worried, too, he said, that Burlington would have unfettered access to a nearly 50-square-mile area and be able to situate well pads, roads and gathering pipelines without having to negotiate easements or rights of way.

“Mr. Fettig, you’re not an engineer, are you?” a lawyer for Burlington asked him. “You’re not a geologist?”

“I’m not a lawyer, either,” Mr. Fettig replied.

Mr. Schwalbe’s lawyers cautioned that he would see a significant drop in his monthly checks, as his royalties would be shared with all the mineral owners in the mega-unit, including ConocoPhillips itself. Down the road, he could recoup that loss, and then some, when wells were developed elsewhere in the unit. But he worried that if, say, oil prices dropped, he would not see that income in his lifetime.

Before the hearing, Mr. Schwalbe had approached Lynn D. Helms, director of the state’s Department of Mineral Resources, with a compromise: unitize the property in phases to be fairer to the owners of the dozen existing wells.

“I realize in the overall scope of things, my check is pretty small, but it’s got a Social Security check beat all to hell,” Mr. Schwalbe said at the hearing. “I’m hoping with the help of the commission this can be worked out equitably for everybody.”

Mr. Helms ultimately executes the policies of the three elected officials — the governor, attorney general and agriculture commissioner, all Republicans — who make up the North Dakota Industrial Commission, which regulates the oil and gas industry. Yet at their monthly meetings, he guides them calmly from vote to vote and rarely encounters dissent. A review by The New York Times of meeting minutes since 2011 found no failed motions concerning oil and gas.

“You feel as if the meetings are a performance, that everything’s sort of done under the table, with a lot of back-room deals,” said Wayde Schafer, the Sierra Club’s sole employee in North Dakota.

Private citizens were not the only ones concerned about the mega-unit. “Before we get all up in arms about it, we have a few questions about what the proposal is and if it is going to benefit us or not,” a state land official wrote to a state oil official in October 2011. “One of the things that has got us so upset is that they are playing this off as a ‘done deal.' ”

It is essentially a done deal, the oil official responded, saying he expected an order at the Nov. 21 commission meeting would “dispose of this case.”

The Nov. 21 vote was postponed.

On Dec. 16, Mr. Schwalbe received a notarized copy of an order signed by Mr. Helms on Dec. 5. Citing “issues in this case of such complexity that additional time is necessary for the commission to render a decision,” it continued the case for 45 days. Mr. Schwalbe breathed a sigh of relief.

Lynn D. Helms, the director of the North Dakota Department of Mineral Resources, has a dual mission as both an oil industry promoter and its chief regulator.

Jim Wilson/The New York Times

On Dec. 20, however, he got a call from his brother Donnie: The commission had taken up the matter after all, voting unanimously to approve the mega-unit.

“We were just dumbfounded,” Mr. Schwalbe said. “It seemed so sneaky. You know how sick a feeling it is when somebody takes your property away and gives it to somebody else? And you don’t even get a chance to be there and protest?”

Mr. Helms’s spokeswoman, Alison Ritter, said, “There’s nothing in that order that says we couldn’t act before the 45 days was up.”

Before the vote, Mr. Helms had recommended approval because, he said, the mega-unit would allow for more efficient drilling with fewer multiwell pads and storage tank batteries and “a much smaller impact on the park.” He also cited “one other major positive” — the recovery of an additional 15 million barrels of oil. During the long discussion that followed, the park was barely mentioned, though Mr. Helms did note that the development called for no tank batteries inside it.

In a statement to The Times, Governor Dalrymple’s office said the commission had acted “solely to preserve the Missouri State Park’s viewscape.”

Under the present development plan, there will be up to 28 wells and, despite what was said before the commission’s vote, three storage tank batteries inside park boundaries, Jesse Hanson, a state parks official, said. He called it “a significant intrusion.”

‘Reluctant Landowners Standing in the Way of Progress’

North Dakota’s small conservation movement has shied away from the confrontational approach that characterizes the antifracking movement elsewhere.

“We all feel we have to issue the apologia that we’re not anti-oil, we just want to see it done responsibly,” Dr. Chaffee said.

The industry, as a result, has not grappled with much opposition. “From a conservation standpoint, I can name most of those people,” said Ron Ness, president of the North Dakota Petroleum Council.

In her split-level house overlooking the majestic White Earth River Valley, Brenda Jorgenson, for one, has been a persistent thorn in the side of industry and state officials.

“ 'Reluctant landowners’ is the phrase they use for people like us,” her husband, Richard Jorgenson, said, laughing. “Reluctant landowners standing in the way of progress.”

While the Schwalbes were battling the mega-unit, the Jorgensons were trying to get their dirty drinking water tested by the state and then challenging, unsuccessfully, the burial of a waste disposal pit they call a “toxic tomb” on their property. Later, also unsuccessfully, they fought the construction of a high-pressure gas pipeline in their fields.

“We had a human prayer line to block that pipeline,” Ms. Jorgenson said. “It’s like having a ticking bomb in your backyard.”

Ms. Jorgenson maintains photo albums that intermingle pictures of her grandchildren doing snow angels with those of fracking trucks advancing on her home. Relatives ask why she and her husband do not just move. “But that’s just what the oil companies want,” Ms. Jorgenson said. “They see us as the trespassers.”

One company, in fact, sued three activist landowners in 2011, seeking damages for trespassing after the men tried to document what they believed was the cover-up of a saltwater spill.

A judge dismissed the lawsuit, calling it an effort to “shut these people up.”

“It was a great result, which is kind of rare,” said Derrick Braaten, their lawyer.

When Mr. Purdon, the United States attorney, tried to hold oil companies accountable for dead migratory birds, the result was not as satisfactory.

For years, federal wildlife agents had been imploring oil companies to cover their waste pits; migratory birds sometimes dived or fell in, dying preventable deaths. But some companies preferred to absorb the cost of citations rather than invest in netting.

In 2011, Mr. Purdon decided firmer action was needed. In one sweep through the Bakken, Richard Grosz, a special agent for the United States Fish and Wildlife Service, collected 28 dead birds from drilling sites. One, found submerged, had a rock tied to its neck: “They had tried to deep-six the evidence,” Mr. Grosz said.

Six oil companies were charged with misdemeanor violations of the Migratory Bird Treaty Act. Mr. Purdon said that within hours of the complaints being filed, he received a call from a friend with a message from top-ranking state officials: “If Tim thought he would be a federal judge someday, that’s done.”

Three companies signed plea agreements. The others fought the charges, and not just in court. During a presidential campaign debate, Mitt Romney, whose energy adviser was chief executive of one of those companies, Continental Resources, mocked the prosecution; The Wall Street Journal called Mr. Purdon “dodo prosecutor of the year.”

A federal judge dismissed the cases, saying the bird act was meant to address deliberate killing by hunters and poachers.

Since then, Mr. Grosz said, “we have not gone back out in the oil patch to look for these things. Birds are still being killed. But we’ve quit.”

A ‘Case of Such Complexity’ Suddenly Becomes a Done Deal

The mega-unit became a reality on Jan. 1, 2012. Mr. Schwalbe’s first royalty check was reduced by 95 percent.

For many months, Mr. Schwalbe and his wife stewed. Then Dr. Chaffee, apolitical during 15 years as president of state universities, decided to get partisan. She joined the Democratic ticket of State Senator Ryan Taylor, a fresh-faced rancher who faced an uphill battle against Mr. Dalrymple for an office under Republican control for two decades.

Mr. Dalrymple was running his own first race for governor, having ascended to the post in 2010 after his predecessor was elected to the United States Senate.

On the day Mr. Taylor announced Dr. Chaffee’s candidacy for lieutenant governor, Mr. Schwalbe stepped off the sidelines of what his wife called a “near-hermit existence.” His first campaign assignment was to study the opposition’s year-end financial disclosure report.

And there he found what he believed to be an explanation for why the mega-unit “case of such complexity” had gotten simpler after Mr. Helms signed the Dec. 5 continuation order.

On Dec. 5, the Exxon Mobil Corporation PAC contributed $600 to Mr. Dalrymple’s campaign. On Dec. 12, Harold G. Hamm, chief executive of Continental, gave $20,000. On Dec. 17, the Marathon Oil PAC gave $5,000. On Dec. 21, the day after the mega-unit vote, for which he was present, Continental’s Bismarck-based lawyer gave $5,000. On Dec. 27, Denbury Resources contributed $5,000.

All these companies held a working interest or lease ownership in the Corral Creek mega-unit. ConocoPhillips, which stood to profit the most, had contributed $1,000 through its PAC in October.

Ryan Taylor, at his ranch in Towner. Running as a Democrat, he lost a bid for governor in 2012 and for agriculture commissioner this year.

Jim Wilson/The New York Times

The governor’s office declined The Times’s requests to interview him, and provided a written statement. It did not verify or deny The Times’s calculation of contributions or respond to specific questions about allegations of conflicts of interest.

Over the campaign, Mr. Dalrymple would collect over $93,000 from those with a direct interest in the mega-unit and a total of about $550,000 from oil-related executives, lawyers and political action committees. That represented a quarter of the $2.16 million in contributions over $200 (the bar for disclosure) to Mr. Dalrymple.

Governors in top oil-producing states typically get industry contributions. In North Dakota, though, the governor’s relationship to those contributors’ interests is uniquely direct because he is chairman of the Industrial Commission.

In California, by contrast, the Department of Conservation supervises the industry. In Alaska, it is a commission appointed by the governor. In Texas, it is the elected Railroad Commission.

“North Dakota’s is a hugely defective setup,” said David C. Thompson, a lawyer in Grand Forks. “Our elected officials regulate companies they get contributions from and companies they own stock in. Nobody ever recuses himself; they just vote.”

In mid-2012, Mr. Schwalbe approached Mr. Thompson at a campaign event. The lawyer happened to be researching state corruption laws on behalf of Brad Crabtree, a Democratic candidate for the Public Service Commission, which, in addition to regulating utilities, oversees oil pipeline siting and mine reclamation.

Mr. Crabtree, who went on to lose, had declined to accept contributions from the energy industry and sought to shine a spotlight on “comprehensive, institutionalized conflict” in the way North Dakota’s regulators conducted business.

Mr. Thompson, meanwhile, discovered a Watergate-era bribery statute that made it a felony for public officials to accept “a thing of pecuniary value” from any “actor” with an imminent or pending proceeding before them. No quid pro quo was necessary; the mere possibility that the official’s “performance or nonperformance” of his duties could be affected made it a crime.

Therefore, Mr. Thompson concluded in a legal analysis posted on the blog NorthDecoder.com, Mr. Dalrymple, in the case of the mega-unit, had taken bribes.

That bombshell landed with a fizzle. The state media took no interest, Mr. Taylor said, and, “as a candidate behind in the polls, who would be accused of trying to make sheer political hay,” he declined to use the allegations.

Then Mr. Thompson got a call from Paul Sorum, a founder of North Dakota’s Tea Party running for governor as an independent.."He said, ‘Are you aware of the citizen-initiated grand jury process?' ” Mr. Thompson related. “You need 10 percent of voters” in a county to sign a petition.

A week before the election, a petition filed in Dunn County, where the mega-unit is, asked a judge to convene a grand jury to determine whether Mr. Dalrymple could be prosecuted for bribery.

On Election Day, Mr. Taylor lost by nearly 30 points. Even before he had formally announced his candidacy for governor, the State Legislature had eliminated two rural districts, one of them his. “That was a dirty deal,” he said.

A couple of weeks later, a judge dismissed the grand jury petition, finding a few signatures illegitimate.

The Seeds of a Resistance Movement

The conservationists of North Dakota often express nostalgia for the strong stance that former Gov. Arthur A. Link took during a coal-mining boom in the 1970s. He pledged to protect the state for future generations “when the landscape becomes quiet again.”

“When the draglines, the blasting rigs, the power shovels and the huge gondolas cease to rip and roar, and when the last bulldozer has pushed the last spoil pile into place and the last patch of barren earth has been seeded to grass or grain, let those who follow and repopulate the land be able to say, ‘Our grandparents did their job well,' ” he said.

An oil well being drilled inside the mega-unit.

Jim Wilson/The New York Times

The current governor is better known for his business acumen than his rhetoric. John Stewart Dalrymple III, 66, is something of a patrician, a rarity in North Dakota. His state biography says he grew up “on the family farm in Casselton,” N.D., but he was born in Minneapolis and attended a private day school there before boarding at St. Paul’s School in New Hampshire and going on to Yale, like his father before him.

The 140-year-old family farm once stretched over 32,000 acres, making it “the largest cultivated farm in the world,” according to North Dakota State University archives. More recently, Dalrymple Farms has been one of the state’s largest recipients of federal commodity subsidies.

Mr. Dalrymple was more of an agribusinessman than the typical North Dakota farmer: “I’m not saying he never greased a combine, but his farm office was in the National Bank building in Casselton and he’d wear a white shirt to work,” said Bill Patrie, a specialist in rural cooperatives who worked with Mr. Dalrymple to establish a farmer-owned pasta co-op.

Mr. Dalrymple served as co-op chairman through eight years in the legislature and a decade as lieutenant governor. While lieutenant governor, he championed the cooperative’s conversion to an investor-owned firm in which he was a major shareholder, and then oversaw its sale to a Canadian conglomerate, making $3.77 million.

“In essence, Jack converted a quasi-public local institution into a personal, one-time profit maker and sold it to a multinational corporation,” Mr. Patrie said, adding, “I believe he used his public office for private gain.”

But Mr. Patrie said the local news media and farmers’ groups did not raise objections.

“We North Dakotans trust our politicians — even when they sell us out,” he said.

Many Democrats were incensed when Edward T. Schafer, a Republican former governor, toured the state in an oil industry-sponsored “Fix the Tax” bus in 2011, arguing that oil taxes should be lowered to prevent the boom from going bust. The effort failed; afterward, Mr. Schafer was named to the board of Continental Resources, and awarded a compensation package, mostly stock, valued at $700,000 that year.

According to Mr. Dalrymple’s 2012 statement of interests, he and his wife own oil stock themselves, including unspecified amounts in at least one company with regular business before his Industrial Commission: Exxon Mobil, a top state producer through its subsidiary XTO.

Because XTO was a working interest owner in the mega-unit, Mr. Schwalbe believed the governor himself could be said to have “owned a piece of the property.”

In early February 2013, Mr. Schwalbe filed a second grand jury petition.

At the same time, state legislators pushed for a higher bar for citizens to convene grand juries so that innocent people would not be subjected to criminal charges, as one legislator put it. They succeeded. And a judge threw out the second citizens’ petition.

Mr. Schwalbe felt defeated, but pockets of resistance were beginning to develop as the boom intensified.

Taking Steps to Assert Greater Authority

Early this year, an irritated crowd at a Mountrail County Commission meeting confronted Mr. Helms, the director of mineral resources, asking why state officials had approved an oil waste pit in the wellhead protection area for a municipal water supply.

Mr. Helms explained that his inspectors had had the wrong maps, adding, “We strive for perfection, but since we’re human, we have to settle for excellence.”

That came across as cavalier to the Rev. Carolyn Philstrom, a young Lutheran pastor, who shot off a letter to the editor of a local newspaper. “I baptize babies with that water,” she wrote, though she subsequently tempered her outspokenness because it bothered parishioners.

When the illegally dumped oil filter socks were discovered, Rick Schreiber, the director of solid waste for McKenzie County, became the rare official voicing outrage at what he called oil company recklessness and state inaction.

“I’m not here to make friends with the oil patch,” Mr. Schreiber said in February as trucks rolled over the radiation detector he had installed at his landfill. “If I’m the guy that has to beat the hornets’ nest with a stick, I’ll do it.”

Flares burning at an oil production site in Watford City, N.D. Residents who live close to flares complain of both the noise and the wasted fuel.

Jim Wilson/The New York Times

This year, the Industrial Commission has gradually taken steps to assert greater authority over the industry.

After applications to drill near a 19th-century battlefield and near the Elkhorn Ranch in Theodore Roosevelt National Park stirred unusually heated public debate, the commission established special procedures including a public comment period for drilling on public, though not private, land near 18 “areas of interest.” The petroleum industry had resisted, cautioning that “radical environmentalists” would exploit the comment period to obstruct development. But conservationists saw the measure as a watered-down version of a proposal that already offered too little, too late.

Next, after more than a dozen mineral owners filed anti-flaring lawsuits, the commission moved to clamp down on a longstanding problem. Some 30 percent of the natural gas produced in the state — compared with less than 1 percent nationwide — was being treated as a byproduct of oil production and burned off.

At a hearing in April, Dr. Lyle Best, a pediatrician, said he lived downwind of tall flares that roared like jetliners and flickered light through his bedroom window.

Rick Schreiber, the director of solid waste for McKenzie County, with an oil filter sock, one of the “used condoms” of the oil industry, at the county landfill.

Jim Wilson/The New York Times

“Our real annoyance, however, is the understanding that these two flares have burned off over 60 million cubic feet of natural gas in the past six months and are continuously wasting enough energy to heat hundreds of homes at the same time that many people in our country are sleeping on the street, and at least one North Dakotan died of hypothermia this winter,” he said. “This doesn’t even address the issue of carbon dioxide and other pollutants.”

When the commission voted in July to require “gas-capture plans” and impose production restrictions if companies did not meet them, Mr. Dalrymple said, “I hope that what we do today, we are serious about.”

And when QEP Resources petitioned to create its own mega-unit, Mr. Dalrymple dissented from the 2-to-1 vote of approval. In its statement, the governor’s office said the QEP mega-unit, unlike the Corral Creek one, would not have provided a “benefit to conservation efforts.” QEP later dropped its plan.

In April 2014, a cleanup crew equipped to handle hazardous radiation removed a large cache of filter socks illegally dumped inside an abandoned fuel station in Noonan, N.D.

A Series of Disappointments

At the entrance to the mega-unit, on the dirt access road built for the hundreds of trucks that now traverse what used to be pristine pastures, Mr. Schwalbe’s cousin, Candyce Kleemann, sat at the wheel of her pickup, photographs on her dashboard.

“These are the before pictures: before the invasion,” said Ms. Kleemann, who lives and ranches inside the unit. “When we fought the unit, they told us there would be minimal damage or changes. But it’s a different landscape. Look, that’s our new saltwater injection well.”

She pointed to a sign: “Danger: H2S. Poisonous gas.” And to another: “Caution: power lines.” Her own sign, proclaiming her land to be private property, made her snort.

“That one’s useless,” she said. “We’re even more powerless than surface owners in the rest of the oil patch. In this unit, oil can go wherever they want here, put roads and gathering lines wherever they want, bury crud in our ground. The state does not seem to care.”

In 2012, Ms. Kleemann’s husband, Robert, a Dunn County commissioner, complained to the state that the unit development plan was being modified, putting 11 wells within a half-mile of six homes.

When an official responded that the changes appeared necessary for topographical reasons, Mr. Kleemann wrote back, “I do not think you could understand our concerns unless we could put a drilling rig on each side of your house so you could listen to the clang of pipes, the roar of motors, the constant beep of the horn and be awakened in the morning to the driller giving orders over the bullhorn and you could try to sleep with the constant noise of Jake Brakes.”

State officials were more concerned that ConocoPhillips was not developing the unit as aggressively as promised. Now the pace has picked up, with several dozen wells drilled in 2013 and several dozen more this year.

In April, when the Schwalbes laid out their concerns to two F.B.I. agents in a windowless room in the Fargo federal building, they felt encouraged. The agents seemed apprehensive “because of the individual involved,” Mr. Schwalbe said, but gradually “their interest was piqued.”

“They thanked us for coming forward,” he said afterward, surprised.

In the summer, though, a final meeting with the agents left them disheartened. The investigation remained open, they were told, but prosecutors saw no federal case to be made.

Mr. Schwalbe, who had wagered that “this year is going to be better because people are starting to get mad,” was disappointed by the November elections, too.

His wife’s former running mate, Mr. Taylor, ran again, this time for agriculture commissioner, proposing that oil well setbacks from homes be increased to a quarter-mile from 500 feet and that pipelines be fitted with antispill devices. But he lost, as did a ballot initiative to set aside tax revenues for conservation. With considerable oil industry backing, the agriculture commissioner was re-elected, as was the attorney general, extending the mandate of the current Industrial Commission.

Mr. Schwalbe does not like to visit Corral Creek anymore. The landscape is, in his eyes, scarred, the tranquillity spoiled. His new outspokenness led him into an uncharacteristic public role as spokesman for a new group, North Dakota Rural Voters.

“I never thought I’d be involved in anything like this,” he said. “At my age, I thought we’d just slide through the rest of our lives. But at a certain point, it became a point of pride for me personally and me as a North Dakotan. I don’t like people taking things that don’t belong to them, not my money, not my property, not my state.”

Sources: North Dakota Department of Health; analysis by The New York Times; Satellite imagery courtesy of Google; final image in flyover by Jim Wilson/The New York Times.

Produced by Gregor Aisch, Hannah Fairfield, John Niedermeyer, Matt Ruby and Jeremy White

Correction: Nov. 27, 2014

An article on Monday about the politics surrounding an unusual land deal in the North Dakota oil country described incorrectly, in some editions, a redistricting plan that eliminated the State Senate seat of Ryan Taylor, a Democrat who ran against Gov. Jack Dalrymple in 2012. Mr. Taylor’s seat was eliminated in late 2011, as he was preparing to announce his candidacy, not after he lost the election the following November.